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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Domestic savings rate reached 18% of the GDP and foreign direct investment (FDI) hit a record level of $5.4 billion in 2007-8. This combination of domestic and foreign investments nearly tripled the size of the economy from $60 billion in 1999 to $170 billion in 2007, according to IMF. Exports nearly tripled from about $7 billion in 1999-2000 to $22 billion in 2007-2008, adding millions of more jobs. Pakistan was lifted from a poor, low-income country with per capita income of just $500 in 1999 to a middle-income country with per capita income exceeding $1000 in 2007.

The PPP government summed up General Musharraf's accomplishments well when it signed a 2008 Memorandum of Understanding with the International Monetary Fund which said:

"Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)

Human Capital Development:

In addition to the economic revival, Musharraf focused on social sector as well. Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.

Overall, Pakistan's human development score rose by 18.9% during Musharraf years and increased just 3.4% under elected leadership since 2008. The news on the human development front got even worse in the last three years, with HDI growth slowing down as low as 0.59% — a paltry average annual increase of under 0.20 per cent. Going further back to the decade of 1990s when the civilian leadership of the country alternated between PML (N) and PPP, the increase in Pakistan's HDI was 9.3% from 1990 to 2000, less than half of the HDI gain of 18.9% on Musharraf's watch from 2000 to 2007.

Acceleration of HDI growth during Musharraf years was not an accident. Not only did Musharraf's policies accelerate economic growth, helped create 13 million new jobs, cut poverty in half and halved the country's total debt burden in the period from 2000 to 2007, his government also ensured significant investment and focus on education and health care. The annual budget for higher education increased from only Rs 500 million in 2000 to Rs 28 billion in 2008, to lay the foundations of the development of a strong knowledge economy, according to former education minister Dr. Ata ur Rehman. Student enrollment in universities increased from 270,000 to 900,000 and the number of universities and degree awarding institutions increased from 57 in 2000 to 137 by 2008. Government R&D spending jumped from 0.1% of GDP in 1999 to 0.7% of GDP in 2007. In 2011, a Pakistani government commission on education found that public funding for education has been cut from 2.5% of GDP in 2007 to just 1.5% - less than the annual subsidy given to the various PSUs including Pakistan Steel and PIA, both of which continue to sustain huge losses due to patronage-based hiring.

Human capital is generally considered as a positive contributor in the economic growth. In this study, we estimate this relationship using time series data of Pakistan for the period 1978 to 2007. A health adjusted education indicator for human capital is used in the standard Cobb-Douglas production function confirms the long run positive relationship between human capital and the economic growth in Pakistan. A sensitivity analysis was also performed in order to check the robustness of the initial findings. The estimation results supported the findings of the previous studies that human capital is positively related to growth and also that the results are robust. The health adjusted education indicator was found to be a highly significant determinant of economic growth, which indicates that both the health and education sectors should be given special attention in order to ensure long run economic growth.

For the last few years, Pakistan’s adult literacy rate has stagnated at 58% – almost half the country’s adult population is unable to read or write. The figure is not surprising when you consider that only 50% of the country’s rural population has ever attended school; the number is higher for urban populations, at 73%.According to the Pakistan Education Atlas 2013, launched on Tuesday, improvement in the education sector moves at a snail’s pace, with 32% of children aged 5-9 years out of school. 17% of primary schools consist of a single room.

It’s not all grim news, though – 91% of girls make it from primary school to middle school (higher than the number of boys, at 78%).State Minister for Education, Trainings and Standards in Higher Education Balighur Rehman formally launched the report on Tuesday and reiterated the government’s pledge to improve education in the country. Even though education has been devolved to provinces, he said, they ‘have agreed to the constitution of a National Curriculum Commission to bring the education system on the same page across Pakistan’. Speaking at the launch, World Food Programme Representative and Country Director in Pakistan Lola Castro said the WFP had contributed to the report as it wished to ‘support and promote this important educational undertaking’ in the country.According to the report, almost seven million children are out of primary schools in the country. “The quality of education across multiple levels is also lagging by most standards,” the report states. Some provinces fare relatively better than others in the education sector, with a ‘survival rate’ – the percentage of students completing primary school education – of 96% in Islamabad Capital Territory and a robust 95% in Gilgit-Baltistan. Khyber Pakhtunkhwa clocks in at 64%. The number is lowest in Balochistan and Sindh – 43% each. Survival rates in Punjab stand at 56%, 48% in Fata.

From primary to middle schoolThe results are encouraging with regards to the number of students able to reach middle school in Pakistan, particularly in Fata, where the number has crept up from 44% in 2010 to 61% this year. 100% of Islamabad students make it to middle school and 87% in Punjab. The number stands at 89% in G-B, 72% in K-P, 69% in Azad Jammu Kashmir and 67% in Balochistan. Sindh has the lowest number of students reaching middle-school level, at 59%.Poor gradeStudents in 64% of primary schools in the country have access to drinking water – in Azad Jammu Kashmir, the number plummets to 27%. In Islamabad, 185 schools out of 191 have access to clean water.Meanwhile, 49% of government primary schools have electricity. Of more than 10,000 schools in Balochistan, only 1,662 schools are provided with electricity....

Higher Education Commission (HEC) Chairman Dr Mukhtar Ahmed has stressed on the need for translating the opportunities created by new technologies into reality while ensuring a positive use of advanced gadgets.

He said that the HEC is committed to facilitating universities and encouraging research activities. “We need to conduct researches that cast positive impacts on society and mitigates the miseries of humanity,” he underlined.

He expressed these views while speaking as a chief guest at the two-day 13th International Conference on Emerging Technologies (ICET) jointly organized by the Capital University of Science and Technology (CUST), in collaboration with the HEC and Institute of Electrical and Electronics Engineers (IEEE) Islamabad.

CUST Vice-Chancellor Dr Mansoor Ahmed, Professor Aamer Iqbal Bhatti, ICET General Chair and a large number of faculty members and students were also present on the occasion.

The HEC Chairman pointed out that water and food security will become vital issues in the near future. He emphasised that the solution to all social ills including terrorism, poverty and unemployment lies in the promotion of education.

“It is the era of a knowledge economy and no nation can make progress without promoting education,” he stated. He said that the universities are responsible for imparting education, creating knowledge and integrating it into society. He urged the faculty to pay special attention to the training of students, as training is imperative for a peaceful society.

Shedding light on the achievements of the HEC during the last 15 years, the chairman said that HEC set off on its journey when Pakistan had only 59 universities, adding that the number of universities in the country has now reached 188. He maintained that the HEC has been putting strenuous efforts to promote ICT in the country.

“Pakistan has one of the best ICT setups of South Asia”, he informed.

He also announced that the HEC plans to establish centres of excellence in data and artificial intelligence.

Sharing the background of the conference, Professor Aamer Iqbal Bhatti said that the first international conference on emerging technologies was held in 2005. He said CUST lays great emphasis on applied research and the 13th ICET is a testimony to that fact. He appreciated the role of the HEC and IEEE Islamabad in collaborating to organise the conference.

Pakistan needs a balanced mix of quality skilled workers, technicians, technologists, engineers, researchers and development scientists to promote the country's industrialization. National University of Technology is Pakistan government's answer to fulfill this need.

https://youtu.be/ZDQ2dy3cBSY

The problem with Pakistan’s technological education hitherto has been a surfeit of theory adept engineers, who lack practical skills upon graduation and are therefore of limited use for industry that demands hands on technologists, who could run industrial processes with the desired degree of competence. NUTECH seeks to fill that void through degree programs that will give both respectability and international recognition to the technologists who would undergo four year degree programs in different disciplines of engineering technology. These engineering technology graduates would be exposed to a curriculum geared towards practical aspects of technology that come in handy for an industrial employer. While the engineering degree holders would concentrate on designing and policy aspects the graduates of NUTECH would be focused on actual execution of technological tasks on shop floor. With a practical orientation these engineering technology graduates would already be adept in engineering practices on graduation unlike a normal engineering graduate whose learning starts upon graduation.

The production of top quality engineering technologists accredited to top class international technology regimes like the ‘Dublin, Sydney, and Bologna Accords’ would be a big shot in the arm for our human resource starved industrial sector. As a pioneer technology university under the Ministry of Education and affiliated with the Higher Education Commission, the University is charged with forging a direct linkage with the industry. While NUTECH would be mainly conducting Degree Programs, it is capable of reaching out to less developed areas through its widespread network of technical and vocational training institutes, producing skilled workers for the industry. With more focus on hands on practical training and inclusion of the industrial sector as a stakeholder in designing of curricula, it would synergise the academic output for the benefit of industry.

Pakistan that has suffered because it has completely bypassed industrial development by taking a shortcut to the services sector. Without industrial sinews, no country in the contemporary world can enjoy sustainable economic development. The time has come to correct that egregious flaw in our national development planning through sustainable initiatives. NUTECH is one such initiative, which was long overdue.

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The Lahore studio will be led by Ammar Zaeem, cofounder of Pakistan’s mobile game studio Caramel Tech which already has a team of 50 engineers.
The move is a big investment into Pakistan as a tech hub, and it shows how the game business is expanding around the globe.

Cloudcade:

Founded by Di Huang in 2013, Cloudcade is known for its popular multiplayer game "Shop Heroes" that pits players against each other in a competition to create the best shop they can. If a player can make a better store and perform more tasks than his or her rivals, he or she wins.

The game is available on the Apple iOS App Store, Google Play, Samsung Galaxy Store, Amazon, Kongregate, and Facebook. It is now also supported on the Apple Watch.

43.5% of Indians, the highest percentage in the world, say they do not want to have a neighbor of a different race, according to a Washington Post report based on World's Values Survey.

About Pakistan, the report says that "although the country has a number of factors that coincide with racial intolerance – sectarian violence, its location in the least-tolerant region of the world, low economic and human development indices – only 6.5 percent of Pakistanis objected to a neighbor of a different race. This would appear to suggest Pakistanis are more racially tolerant than even the Germans or the Dutch".

Housing Discrimination:

It appears that there is a small but militant minority in Pakistan that is highly intolerant, but the vast majority of people are tolerant. My own experience as a former Karachi-ite is that there is little or no race or religion based housing segregation, the kind that is rampant in India where Muslims are not welcome in most Hindu-dominated neigh…

The development of JF-17, a modern highly capable and relatively inexpensive fighter jet, is the crowning achievement to-date of the Pakistan-China defense production cooperation. It's being deployed by Pakistan Air Force with Pakistan Aeronautical Complex (PAC). The latest version is capable of launching a variety of nuclear and conventional weapons ranging from smart bombs and air-launched cruise missile Raad to anti-ship missiles.

I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
www.pakalumni.com
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